Refusal to accept ‘comparable’ role blocks right to redundancy pay


Refusal to accept ‘comparable’ role blocks right to redundancy pay

A worker rejected a role that was comparable in terms of pay and conditions to her redundant position, and this had the effect of removing her entitlement to severance payment under the agreement, Fair Work Australia determined.


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A worker rejected a role that was comparable in terms of pay and conditions to her redundant position, and this had the effect of removing her entitlement to severance payment under the agreement, Fair Work Australia determined.
In August 2008, the worker’s position — National Customer Development Manager — was declared redundant by her employer, Allianz Australia services Pty Ltd.
The worker was advised that she had been found a ‘comparable role — Underwriter, Schemes and Facilities — and that unless she accepted the position, it would be assumed she had resigned.
When the worker declined the new role on the grounds that it was not comparable to her redundant position, Allianz not only terminated her employment on the grounds of redundancy, but denied that she was entitled to any severance payment.
The worker appealed to Fair Work Australia on the grounds that Allianz did not comply with the terms of her agreement.
Key issue: ‘Suitable alternative’ or ‘comparable’ position?
Before FWA Commissioner Michael Roberts, the worker contended that the alternative position offered to her by Allianz was not a ‘comparable’ position, but a ‘suitable alternative’ position and therefore the terms of her agreement entitled her to decline the role and receive redundancy benefits in the order of $75,000.
Cmr Roberts provided a general explanation of the redeployment and redundancy components of the relevant agreement:
‘It is clear on the face of clause 10.2 (Redeployment and Redundancy) of the BPA [agreement] that retrenchment of an employee is to be a last resort. The terms of subclause 10.2 obligate Allianz at law to make every endeavour to redeploy employees whose positions have been made redundant. This takes the form in the first instance of seeking a “comparable position” for such an employee and if such a position is not available, to offer a “suitable alternative position” if one is available. The Agreement goes on to set out in some considerable detail the steps to follow.
Should an employee be offered a comparable position then the employee is obligated to take up that position or to leave the employ of Allianz without payment of redundancy benefits. If no comparable position is available and the employee is offered a suitable alternative position then the employee has a period of up to two months to elect whether to accept the suitable alternative position or be paid redundancy benefits. In cases where an employee’s role is abolished and there is no offer of a comparable position or a suitable alternative position then the employee automatically becomes entitled to redundancy benefits, which are set out at subclause 10.2.5 of the BPA.’
In summary, Cmr Roberts provided that Allianz is not obligated under the agreement to offer a suitable alternative position (and thus entitle an employee to be paid redundancy benefits ‘on their own motion so to speak’) if a comparable position is offered.
Continuation of previous salary and entitlements
Cmr Roberts then turned to determining whether the terms of the agreement had been correctly applied in the worker’s case. This required, as correctly submitted by Allianz, the determination of two issues:
  1. Was the position offered to the worker a ‘comparable’ position for the purpose of the agreement?
  2. If not, is the worker entitled to redundancy payments under the agreement.
On the evidence, CMR Roberts determined that the alternative role offered to the worker was comparable to her redundant position and that in refusing the new role, she ended her employment with Allianz.
In reaching this conclusion, Cmr Roberts said that he had preferred the evidence of Allianz when it differed or was in conflict with that of the worker’s, and that he was satisfied that Allianz’s process for conducting job evaluations was carried out objectively and that it was not conducted in such a way as to bring forth a pre-determined result.
‘The key element to Ms Peart’s [worker’s] rejection of the New Role as not being comparable lies in her 2001 decision not to pursue a career in underwriting,’ Cmr Roberts explained.
‘On her evidence, there was no doubt that she possessed the skills and abilities to perform the New Role but she just did not want to work in underwriting. Other arguments concerning such matters as seniority, decision-making authority, criticality of outputs etc. are all subordinate to the key argument by Ms Peart that the change in duties was unreasonable in the light of her career plans and experience. I am unable to accept her position on this point. Ms Peart was a skilled and valued employee of Allianz and the Company cannot be faulted for making every effort to retain her services. I do not believe that the offering of the New Role was designed by Allianz to avoid redundancy benefits. The Company fulfilled its BPA obligations. It genuinely wanted to retain Ms Peart’s services.’
‘The question of the work value of the New Role loomed large in proceedings. I am satisfied on the evidence of the Company’s witnesses together with the materials submitted into evidence that the New Role was at least comparable to the Old Role. In my view, the primary method of recognising the work value of any position is the salary which attaches to that position. In the case of Ms Peart, her salary and entitlements were to be continued from the Old Role to the New Role. I do not agree with the submissions made that the salary and entitlements of the previous holder of the Old Role are in any way relevant to my consideration. The continuation of Ms Peart’s previous salary and entitlement arrangements in the New Role appears reasonable to me for someone starting out in that role.’
Cmr Roberts dismissed the worker’s application. 
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